Perma-Pipe International Holdings, Inc.

YEARS ENDED JANUARY 31, 2026 AND 2025

(Tabular amounts in thousands, except per share data, or unless otherwise specified)

Note1 - Business information

Perma-Pipe International Holdings, Inc. ("PPIH", the "Company", "we", or "our") was incorporated in Delaware on* October**12,* 1993. The Company is engaged in the manufacture and sale of products inone distinct segment: Piping Systems.

Fiscal year.The Company's fiscal year ends on January 31.Years, results and balances described as2025 and2024 are for the fiscal years ended January 31, 2026and2025, respectively.

***Nature of business.*The Company engineers, designs, manufactures and sells specialty piping systems and leak detection systems. Specialty piping systems include: (i) insulated and jacketed district heating and cooling ("DHC") piping systems for efficient energy distribution from central energy plants to multiple locations, (ii) primary and secondary containment piping systems for transporting chemicals, hazardous fluids and petroleum products, and (iii) the coating and/or insulation of oil and gas gathering and transmission pipelines, and (iv) liquid and powder based anti-corrosion coatings applied both to the external and internal surfaces of steel pipe, including shapes such as bends, reducers, tees, and other spools/fittings used in pipelines for the transportation of oil and gas products and potable water. The Company's leak detection systems are sold with its piping systems or on a stand-alone basis, to monitor areas where fluid intrusion maycontaminate the environment, endanger personal safety, cause a fire hazard, impair essential services or damage equipment or property.

**Geographic information.Net sales are attributed to geographic areas based on the location of thefacility from which the product is shipped. Sales originating from international operations represented 71.7% and 66.9% of total net sales in2025 and2024, respectively. Long-lived assets, which consist of property, plant, and equipment, are attributed to geographic areas based on their physical location.

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Note2 - Significant accounting policies

***Principles of Consolidation and Basis of Presentation.***The consolidated financial statements include the accounts of the Company and its subsidiaries. This includes all wholly owned subsidiaries as well as certain joint ventures in which the Company has a controlling financial interest. All intercompany balances and transactions have been eliminated. Certain amounts in prior periods have been reclassified to conform to the current year presentation.

***Use of estimates.***The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue recognition.In accordance with Accounting Standards Codification ("ASC") 606, *Revenue from Contracts with Customers, the Company recognizes revenue for certain contracts when a customer obtains control of promised goods or services. Other contracts recognize revenues using periodic recognition of income. For these contracts, the Company uses the "over time" accounting method. Under the input approach, income is recognized in each reporting period based on the status of the uncompleted contracts and the current estimates of costs to complete. The amount of revenue recognized is determined by the relationship of costs incurred to the total estimated costs of the contract. Provisions are made for estimated losses on uncompleted contracts in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions and final contract settlements, mayresult in revisions to costs and income. Such revisions are recognized in the period in which they are determined. Claims for additional compensation due to the Company are recognized in contract revenues when realization is probable, the amount can be reliably estimated, and the amount isnot* subject to reversal. Under the output method, revenue is recognized based on the direct measurement of the value of goods or services transferred to date relative to the remaining goods promised under the contract. See Note4 - Revenue recognition, in the Notes to Consolidated Financial Statements, for further information relating to input and output accounting methods.

***Shipping and handling.***Shipping and handling costs are included in cost of sales, and the amounts invoiced to customers relating to shipping and handling are included in net sales.

**Operating cycle.The length of contracts varies but is typically less thanone year. The Company includes in current assets and liabilities amounts realizable and payable in the normal course of contract completion unless completion of such contracts extends significantly beyondone year.

***Consolidation.***The consolidated financial statements include the accounts of the Company and its subsidiaries. This includes all wholly owned subsidiaries as well as certain joint ventures in which the Company has a controlling financial interest. All intercompany balances and transactions have been eliminated.

**Translation of foreign currency.Assets and liabilities of consolidated foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at year-end. Revenues and expenses are translated at average exchange rates prevailing during the year. The resulting translation adjustments are included in stockholders' equity as part of accumulated other comprehensive loss. Gains or losses on foreign currency transactions and the related tax effects are reflected in net income. The aggregate foreign exchange transaction loss recognized in the income statement was $0.3 million in both2025 and2024. Additionally, translation adjustments attributable to intercompany transactions, such as loans and receivables, are included in stockholders' equity as part of accumulated other comprehensive loss.

***Contingencies.*The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, including those involving environmental, tax, product liability and general liability claims. The Company accrues for such liabilities when it is probable that future costs will be incurred, and the amount can be reasonably estimated. Such accruals are based on developments to date, the Company's estimates of the outcomes of these matters, and its experience in contesting, litigating and settling other similar matters. The Company doesnot currently anticipate the amount of any ultimate liability with respect to these matters will materially affect the Company's financial position, liquidity, or future operations.

Cash and cash equivalents.All highly liquid investments with a maturity ofthree months or less when purchased are considered to be cash equivalents. Cash and cash equivalents was $18.7 million and $15.7 million as of January 31, 2026 and2025, respectively. On* January 31, 2026*, $0.2 million was held in the United States and $18.5 million was held by foreign subsidiaries. On* January 31, 2025*, $0.3 million was held in the United States and $15.4 million was held by foreign subsidiaries.

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Restricted cash.There wasno restricted cash held in the United States on January 31, 2026 or2025. Restricted cash held by foreign subsidiaries was $3.6 million and $1.4 million as of January 31, 2026 and2025, respectively. Restricted cash held by foreign subsidiaries related to fixed deposits that also serve as security deposits and guarantees.

Accounts receivable.The majority of the Company's accounts receivable are due from geographically dispersed contractors and manufacturing companies. Credit is extended based on an evaluation of a customer's financial condition. In the United States, collateral isnot generally required. In the United Arab Emirates ("U.A.E."), Saudi Arabia, Egypt and India, letters of credit are usually obtained for significant orders. Accounts receivable are due within various time periods specified in the terms applicable to the specific customer and are stated as amounts due from customers net of an allowance for claims and doubtful accounts. Standard payment terms are generally net30 to60 days. The Company maintains an allowance for credit losses for accounts receivable. The assessment of the allowance for credit losses involves certain judgments and estimates. Management estimates the allowance balance using relevant available information from internal and external sources relating to past events, current conditions and reasonable and supportable forecasts. The Company* mayalso establish an allowance for credit losses for specific receivables when it is probable that a specific receivable willnot* be collected and the loss can be reasonably estimated. Past due trade accounts receivable balances are written off when the Company's collection efforts have been unsuccessful in collecting the amount due and the amount is deemed uncollectible. The write off is recorded against the allowance for credit losses.

***Concentration of credit risk.*The Company maintains its U.S. cash in bank deposit accounts at financial institutions that are insured by the Federal Deposit Insurance Corporation ("FDIC"). Cash balances are below FDIC limits. The Company hasnot experienced any losses in such accounts. The Company's foreign cash is held in accounts at multiple institutions in the various countries in which the Company operates, limiting the concentration of risk internationally. The Company maintains a broad and diversified customer base, operating throughout the United States, the Middle East, and Canada.

As of* January 31, 2026*, one customer accounted for approximately 23% of the Company’s total accounts receivable. For the year ended* January 31, 2026*, this same customer represented approximately 12% of total net sales. As of* January 31, 2025*, and for the year then ended, no single customer accounted for more than10% of total accounts receivable or net sales. The Company monitors the creditworthiness of this customer on an ongoing basis. As of* January 31, 2026,*no allowance for credit losses was deemed necessary as the Company expects to collect the full carrying value of the outstanding balance.

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***Accumulated other comprehensive loss.***Accumulated other comprehensive loss represents the change in equity from non-owner transactions and consists of foreign currency translation.

***Inventories.*Inventories are stated at the lower of cost or net realizable value. Cost is determined using thefirst-in,first-out method for all inventories.

The Company conducts periodic reviews of its inventory and records allowances for slow moving and obsolete items to reflect their net realizable value, which is primarily attributable to finished goods.

**Long-lived assets.Property, plant and equipment are stated at cost. Interest is capitalized in connection with the construction of facilities and amortized over the estimated useful life of the asset. Long-lived assets are reviewed for possible impairment whenever events indicate that the carrying amount of such assets maynot be recoverable. If such a review indicates impairment, the carrying amount of such assets is reduced to an estimated fair value.

Depreciation is computed using the straight-line method over the estimated useful lives of assets, as presented in the following table. Leasehold improvements are depreciated over the remaining life of the lease or its useful life, whichever is shorter. Amortization of finance lease assets is included in depreciation. Depreciation expense was approximately $3.2 million and $3.6 million in the years ended* January 31, 2026* and2025, respectively.

Impairment of long-lived assets.The Company's assessment of long-lived assets and other identifiable intangibles is based upon factors that market participants would use in accordance with the accounting guidance for the fair value measurement of assets. At January 31, 2026, the Company performed an assessment to determine whether there were any triggering events that mayhave occurred which could indicate that the carrying value of the Company's long-lived assets arenot recoverable. Based on this assessment, the Company didnot identify any triggering events that would indicate that the carrying amounts* may**not* be recoverable with respect to long-lived assets. Accordingly, there wasno impairment charge for the year ended* January 31, 2026*.

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Goodwill. The purchase price of an acquired company is allocated between intangible assets and the net tangible assets of the acquired business with the residual of the purchase price recorded as goodwill. All identifiable goodwill as of* January 31, 2026* and2025, is attributable to the purchase of the remaining50% interest in Perma-Pipe Canada, Ltd., which occurred in2016.

The following table provides a reconciliation of changes in the carrying amount of goodwill:

The Company performs an impairment assessment of goodwill annually as of* January 31,or more frequently if triggering events occur, based on the estimated fair value of the related reporting unit or intangible asset. At January 31, 2026*, the Company performed a qualitative assessment to determine whether there were any triggering events that* mayhave occurred which could indicate that more likely thannot* that the fair value of the reporting unit didnot exceed its carrying amount. Based on this assessment, the Company didnot identify any triggering events that would indicate that the fair value is less than the carrying value of the reporting unit for the year ended* January 31, 2026*. Accordingly, performing a quantitative goodwill impairment test wasnot required.

Other intangible assets with definite lives.The Company owns several patents including those covering features of its piping and electronic leak detection systems. Patents are capitalized and amortized on a straight-line basis over a periodnot to exceed the legal lives of the patents. The Company expenses costs incurred to renew or extend the term of intangible assets. Gross patents were $2.8 million and $2.7 million as of January 31, 2026 and2025, respectively. Accumulated amortization was approximately $2.6 million as of* January 31, 2026* and2025. Amortization over the nextfive fiscal years will be less than $0.1 million and an insignificant amount thereafter. Amortization expense is expected to be recognized over the weighted-average period of 8.7 years.

Research and development**.Research and development expenses consist of materials, salaries and related expenses of engineering personnel and outside services for product development projects. Research and development costs are expensed as incurred. Research and development expense was insignificant in the years ended January 31, 2026 and * January 31, 2025*.

**Income taxes.Deferred income taxes have been provided for temporary differences arising from differences in the basis of assets and liabilities for tax and financial reporting purposes. Deferred income taxes on temporary differences have been recorded at the current tax rate. The Company assesses its deferred tax assets and liabilities for realizability at each reporting period. A valuation allowance is recorded to reduce deferred tax assets when it is more likely thannot that a tax benefit willnot be realized.

The Company recognizes a tax position in its consolidated financial statements only after determining that the relevant tax authority would more likely thannot sustain the position following an audit. For tax positions meeting the more likely thannot threshold, the amount recognized in the financial statements is the largest benefit that has a greater than50% likelihood of being realized upon ultimate settlement with the relevant tax authority. For further information, see Note7 - Income taxes.

One of the base broadening provisions of the U.S. Tax Cuts and Jobs Act of2017 ("Tax Act") is the Global Intangible Low-Taxed Income provisions ("GILTI"). In accordance with guidance issued by the Financial Accounting Standards Board (“FASB”) staff, the Company has adopted an accounting policy to treat any GILTI inclusions as a period cost if and when incurred. Thus, for the years ended* January 31, 2026and2025,* deferred taxes were computed without consideration of the possible future impact of the GILTI provisions, and any current year impact was recorded as a part of the current portion of income tax expense.

Fair value of financial instruments*.* The Company classifies cash and cash equivalents, accounts receivable, and accounts payable based on carrying values that approximate their fair value due to the short-term nature of these instruments. The carrying amount of the Company's short-term debt, revolving line of credit and long-term debt approximate fair value because the majority of the amounts outstanding accrue interest at variable rates.

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**Net income per common share.Earnings per share ("EPS") is computed by dividing net income attributable to common stock by the weighted average number of common shares outstanding (basic). The Company adjusted for dilutive shares in2025 and2024, assuming conversion, exercise, or contingent issuance of securities that would have an anti-dilutive effect on earnings per share. The dilutive shares are in the following table:

Equity-based compensation. The Company issues or has issued various types of stock-based awards to employees and directors: restricted stock, deferred stock and stock options. Non-cash compensation expense associated with restricted stock is based on the fair value of the common stock at the grant date, and amortized using the straight line method over a vesting period range ofone tofour years. Compensation expense associated with deferred stock which has been awarded to non-employee directors is based upon the fair value of the common stock at the date of grant, and since the grant vests immediately it is expensed on the date of the grant. Stock*** ***compensation expense for stock options is recognized ratably over the requisite service period of the award. The Black-Scholes option-pricing model is utilized to estimate the fair value of option awards.

Treasury Stock. In accordance with ASC505, Equity, the Company accounts for share repurchases pursuant to the repurchase program under the cost method. This results in recognizing the shares as treasury stock, a reduction of stockholders' equity on the Consolidated Balance Sheets and on the Consolidated Statements of Stockholders' Equity. These amounts include costs associated with the acquisition of the shares. On* August 29, 2024,the Company retired all remaining treasury stock previously acquired under the stock repurchase program. The retirement was recorded as a reduction to common stock based on the par value of the shares, and the excess over par value was recorded as a decrease in retained earnings in accordance with ASC505*-30, Equity - Treasury Stock.

Segments. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker ("CODM") in making decisions regarding resource allocation and assessing performance. The Company’s Chief Executive Officer is the CODM, and he uses the Company's consolidated financial information in determining how to allocate resources and assess performance. The Company has determined that it operates asone segment.

Accounting Pronouncements Recently Adopted. In* December 2023,the FASB issued ASUNo.* 2023-09, Income Taxes (Topic740*): Improvements to Income Tax Disclosures*. Pursuant to this standard update, companies are required to provide additional information, which is primarily attributable to the rate reconciliation and income taxes paid. The Company adopted the standard effective for the year ended* January 31, 2026.The prospective adoption of this standard update expanded the Company's disclosures related to income taxes, but didnot* impact its consolidated financial statements.

Accounting PronouncementsNot Yet Adopted.In November 2024,the FASB issued ASUNo. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic220-40): Disaggregation of Income Statement Expenses. In accordance with this standard update, companies are required to disclose specified information about certain costs and expenses in the notes to the financial statements at each interim and annual reporting period. The amendments are effective for fiscal years beginning after* December 15, 2026,and for interim periods within fiscal years beginning after December 15, 2027.*Early adoption is permitted. The Company is currently evaluating the impact of this standard update on its consolidated financial statements and related disclosures.

In* September 2025,the FASB issued ASUNo.* 2025-06, Intangibles - Goodwill and Other Internal-Use Software (Subtopic350*-40): Targeted Improvements to the Accounting for Internal-Use Software, aimed at modernizing the guidance for internal-use software development. This guidance removes reference to "development stages" and introduces a "probable-to-complete" recognition threshold to determine when to begin capitalizing software costs. This guidance will be effective starting with our quarterly report for the fiscal quarter ending April 30, 2028,*with prospective, retrospective, or modified transition methods allowed and early adoption permitted. We are currently evaluating the impact of this ASU, including our timing and method of adoption.

In* December 2025,the FASB issued ASUNo.* 2025-11,* Interim Reporting (Topic270): Narrow-Scope Improvements* (“ASU2025-11”). ASU2025-11 is intended to update the guidance in Topic270 by improving navigability of the required interim disclosures, clarifying when that guidance is applicable and adding a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. This standard update will be effective for interim reporting periods within annual reporting periods beginning after* December 15, 2027,*with early adoption permitted at any time prior to the effective date and should be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. We are currently evaluating the impact of the standard on our consolidated financial statements and related disclosures.

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Note3 - Retention

A retention receivable is a portion of an outstanding receivable balance amount withheld by a customer until a contract is fully completed as specified in the contract. As of* January 31, 2026* and2025, the Company hadshort-term retention receivables of $3.0 million and $3.3 million, respectively, which were included as a component of trade accounts receivable. Additionally, the Company had long-term retention receivables of $3.0 million and $2.6 million as of* January 31, 2026* and2025, respectively. The long-term retention receivable balances were included as a component of other long-term assets on the Consolidated Balance Sheets.

In2015, the Company completed a project in the Middle East with billings in the aggregate amount of approximately $41.9 million. The system hasnot yet been commissioned by the customer. Nevertheless, the Company has settled approximately $ 40.7 million as of * January 31, 2026* , with a remaining balance due in the amount of $ 1.2 million, all of which pertains to retention clauses within the agreements with the Company's customer, and which become payable by the customer when this project is fully tested and commissioned. Of this retention amount, $ 1.2 million is classified as a long-term asset.

The Company is actively pursuing collection of the customer’s outstanding balances. During2025 and2024, partial payments of $0.6 million and $0.4 million were received, respectively. Furthermore, the Company was engaged by the customer for additional work in2026 under customary trade credit terms, reflecting continued cooperation between the parties. Based on these factors, no allowance for credit losses was recorded against this receivable as of* January 31, 2026*. If collection efforts prove unsuccessful, an allowance for all or substantially all of the remaining balance* may*be required in future periods.

For further information regarding accounts receivable, see Note2 - Significant accounting policies, in the Notes to Consolidated Financial Statements.

Note4 - Revenue recognition

The Company accounts for its revenues under ASC606, Revenue from Contracts with Customers.

Revenue from contracts with customers

The Company defines a contract as an agreement that has approval and commitment from both parties, defined rights and identifiable payment terms, which ensures the contract has commercial substance and that collectability is reasonably assured.

The Company’s standard revenue transactions are classified intotwo main categories:

In accordance with ASC606-10-25-27 through29, the Company recognizes specialty piping and coating systems revenue over time as the manufacturing process progresses becauseone of the following conditions exist:

Products revenue is recognized at a point in time when control of the promised goods is transferred to the customer, generally upon shipment, or as services are performed (ASC606-10-25-30).

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A breakdown of the Company's revenues by revenue class for the years ended* January 31, 2026* and2025 is as follows.

The input method is used by certain operating entities to measure revenue by the costs incurred to date relative to the total estimated costs to satisfy the performance obligation. Generally, these contracts are considered a single performance obligation satisfied over time. Due to the custom nature of the goods and services, the Company believes this method is the most faithful depiction of the transfer of goods and services to the customer as it measures the value of the work performed. Costs include all material, labor, and direct costs incurred to satisfy the performance obligations of the contract. Revenue recognition begins when a project's costs are initially incurred. Estimates of total contract costs are reviewed and revised periodically as work progresses.

The output method is used by all other operating entities to measure revenue by the direct measurement of the value of goods or services transferred to date relative to the remaining goods promised under the contract. Due to the requirements of certain customers, these contracts often require formal inspection protocols or specific export documentation for units produced. Therefore, the output method is the most faithful depiction of the Company’s performance. Depending on the terms of the contract, revenue* maybe recognized upon the transfer of control, which may*occur when units are produced, inspected, and held by the Company at the customer’s request, or when units are produced, inspected, and shipped.

Some of the Company’s operating entities invoice and collect milestones or other contractual obligations prior to the transfer of goods and services, but donot recognize revenue until the performance obligations are satisfied under the methods discussed above. These amounts are recorded as contract liabilities on the Consolidated Balance Sheets until the performance obligation is satisfied.

Contract modifications that occur prior to the start of the manufacturing process will supersede the original contract and revenue is recognized using the modified contract value. Contract modifications that occur during the manufacturing process (changes in scope of work, job performance, material costs, and/or final contract settlements) are recognized in the period in which the revisions become known. Provisions for estimated losses on uncompleted contracts are recorded in the period in which such losses are determined.

The transaction price associated with the Company's contracts with customers is generally determined based on the fixed amount of consideration as specified in a contract that is generallynot subject to change. Additionally, from time to time the transaction price* mayalso include variable consideration in certain instances where it is deemed probable that a significant reversal of cumulative revenue recognized willnot* occur. The aggregate of these amounts represents the total transaction price, which excludes amounts that are attributable to sales and value added taxes, or amounts collected on behalf ofthird parties. The total transaction price is allocated to the performance obligations and recognized as revenue based on the project type and the method used to measure the transfer of promised goods and services to customers. Transaction prices relating to cost-plus contracts are determined by applying the applicable profit margin to costs incurred, whereas transaction prices relating to fixed-price contracts are determined on a lump-sum basis. Standard payment terms are generally net30 to60 days, which are customer-specific.

Contract assets and liabilities

Contract assets represent revenue recognized in excess of amounts billed for contract work in progress for which the Company has a valid contract and an enforceable right to payment for work completed. Contract liabilities represent billings in excess of costs and estimated earnings for contract work in progress for which the Company has a valid contract and an enforceable right to payment for work completed. Both customer billings and the satisfaction (or partial satisfaction) of the performance obligation(s) occur throughout the manufacturing process and impact the period-end balances in these accounts. In addition, contract assets include receivables or amounts that are billable based on milestones or conditions beyond the mere passage of time. For additional information, see Note3 - Retention, in the Notes to Consolidated Financial Statements, andUnbilled accounts receivable, as further described below.

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The Company anticipates that substantially all costs incurred on uncompleted contracts as of* January 31, 2026* will be billed and collected withinone year.

The following table shows the reconciliation of the cost in excess of billings and billings in excess of costs:

Substantially all of the $1.2 million and $0.5 million contract liabilities balances at* January 31, 2025* and2024, respectively, were recognized in revenues during2025 and2024, respectively.

Unbilled accounts receivable

The Company has recorded $28.8 million and$18.9 million of unbilled accounts receivable on the Consolidated Balance Sheets as of* January 31, 2026* and2025, respectively, from revenues generated by certain of its subsidiaries. In these instances, the Company has fulfilled all performance obligations and has recorded revenue under the respective contracts. The deliverables under these contracts have been accepted by the customer, and the Company has an unconditional right to payment; however, billings will be made once the customer takes possession of or arranges shipping for the products. The Company anticipates that substantially all of the amounts included in unbilled accounts receivable as of* January 31, 2026* will be billed withinone year.

Practical expedients

Costs to obtain a contract arenot considered to be incremental or material, and project duration generally doesnot span more thanone year. Accordingly, the Company applies a practical expedient for these types of costs and as such, they are expensed in the period incurred.

As a result of the Company's contracts having an expected duration of less thanone year, a practical expedient was applied regarding disclosure of the aggregate amount and future timing of performance obligations that are unsatisfied or partially satisfied as of the end of the reporting period.

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Note5 - Debt

During the current year, the Company disaggregated its ‘Revolving lines - foreign' into ‘Revolving credit agreement – United Arab Emirates,' ‘Revolving credit agreement – Egypt,’ and ‘Revolving credit agreement – Saudi Arabia.’ Further, ‘Short-term debt’ and ‘Long-term debt’ were stratified by underlying instrument for presentation purposes. This refined presentation provides more detailed information regarding the Company’s capital structure. Prior period amounts have also been disaggregated to conform to the current year presentation. This update in presentation hadno impact on total liabilities, net income, or cash flows.

The following table summarizes the Company's scheduled maturities in each of the nextfive fiscal years:

Revolving lines - North America**.** On* September 20, 2018,*the Company and certain of its U.S. and Canadian subsidiaries (collectively, together with the Company, the “North American Loan Parties”) entered into a Revolving Credit and Security Agreement (the “Credit Agreement”) with PNC Bank, National Association ("PNC"), as administrative agent and lender, providing for athree-year, $18 million Senior Secured Revolving Credit Facility, subject to a borrowing base including various reserves (the “Senior Credit Facility”).

On* September 17, 2021,the North American Loan Parties executed an extension of the Credit Agreement with PNC, providing for a newfive-year, $18 million senior secured revolving credit facility, subject to a borrowing base including various reserves (the “Renewed Senior Credit Facility”). The Company's obligations under the Renewed Senior Credit Facility are currently guaranteed by Perma-Pipe Canada, Inc. Each of the North American Loan Parties other than Perma-Pipe Canada, Inc. is a borrower under the Renewed Senior Credit Facility (collectively, the “Borrowers”). The Renewed Senior Credit Facility matures on September 20, 2026.*

The Borrowers have used and will continue to use borrowings under the Renewed Senior Credit Facility (i) to fund future capital expenditures; (ii) to fund ongoing working capital needs; and (iii) for other corporate purposes, including potentially additional stock repurchases. Borrowings under the Renewed Senior Credit Facility bear interest at a rate equal to an alternate base rate, SOFR rate index, plus, in each case, an applicable margin. The applicable margin is based on a fixed charge coverage ratio ("FCCR") range. Interest on alternate base rate borrowings is the alternate base rate (as defined in the Renewed Senior Credit Facility) plus an applicable margin ranging from 1.00% to 1.50%, based on the FCCR in the most recently reported period. Interest on SOFR rate borrowings is the SOFR rate (as defined in the Renewed Senior Credit Facility) plus an applicable margin ranging from 2.00% to 2.50%, based on the FCCR in the most recently reported period, as well as an additional SOFR adjustment ranging from 0.10% to 0.25%, based on the term of the interest period. Additionally, the Borrowers pay a 0.25% per annum facility fee on the unused portion of the Renewed Senior Credit Facility.

Subject to certain exceptions, borrowings under the Renewed Senior Credit Facility are secured by substantially all of the North American Loan Parties’ assets. Subject to certain qualifications and exceptions, the Renewed Senior Credit Facility contains covenants that, among other things, restrict the North American Loan Parties’ ability to create liens, merge or consolidate, consummate acquisitions, make investments, dispose of assets, incur debt, and pay dividends and other distributions. In addition, the North American Loan Parties* maynot* make capital expenditures in excess of $5.0 million annually, plus a limited carryover of unused amounts. Further, the North American Loan Parties* maynot* make repurchases of the Company's common stock in excess of $3.0 million.

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The Renewed Senior Credit Facility also contains financial covenants requiring the North American Loan Parties to achieve a ratio of its EBITDA (as defined in the Renewed Senior Credit Facility) to the sum of scheduled cash principal payments on indebtedness for borrowed money and interest payments on the advances under the Renewed Senior Credit Facility to benot less than 1.10 to1.00 for anyfive consecutive days in which the undrawn availability is less than $3.0 million or any day in which the undrawn availability is less than $2.0 million. As of* January 31, 2026*, the calculated ratio was greater than 1.10 to1.00. In order to cure any future breach of these covenants by the North American Loan Parties, the Company* mayrepatriate cash from any of its foreign subsidiaries that are otherwisenot* a party to the Renewed Senior Credit Facility in an amount which, when added to the amount of the Company’s Consolidated EBITDA, would result in compliance on a pro forma basis. The Company was in compliance with respect to these covenants as of and for the year ended* January 31, 2026*.

The Renewed Senior Credit Facility contains customary events of default. If an event of default occurs and is continuing, then PNC* may*terminate all commitments to extend further credit and declare all amounts outstanding under the Renewed Senior Credit Facility due and payable immediately. In addition, if any of the North American Loan Parties or certain of their subsidiaries become the subject of voluntary or involuntary proceedings under any bankruptcy, insolvency or similar law, then any outstanding obligations under the Renewed Senior Credit Facility will automatically become immediately due and payable. Loans outstanding under the Renewed Senior Credit Facility will bear interest at a rate of 2.00% per annum in excess of the otherwise applicable rate (i) while a bankruptcy event of default exists or (ii) upon the lender's request, during the continuance of any other event of default.

As of* January 31, 2026*, the Company had borrowed an aggregate of $10.7 million at a rate of 7.8% and had $2.7 million available under the Renewed Senior Credit Facility. As of* January 31, 2025*, the Company had borrowed an aggregate of $6.8 million at a rate of 9.0% and had $3.7 million available under the Renewed Senior Credit Facility.

Subsequent Event—* Credit Agreement.**Subsequent to January 31, 2026,the Company entered into a credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., which effectively replaced the Company’s existing credit facility with PNC Bank, National Association. The Credit Agreement provides for a revolving credit commitment of up to $18.0 million, subject to customary borrowing base limitations, and matures in October 2027.*Borrowings bear interest at variable rates based on SOFR or an alternate base rate, plus an applicable margin.

The Credit Agreement is intended to serve as a temporary bridge financing arrangement. The Company expects to enter into a new global credit facility with a syndicate of lenders in the coming months; however, there can beno assurance as to the timing or terms of such a transaction. Upon execution of the global credit facility, any outstanding borrowings under the Credit Agreement are expected to be transitioned into the new facility. As the Credit Agreement was executed after the balance sheet date, no amounts were outstanding under this facility as of* January 31, 2026.*

Credit facilities - foreign . The Company also has credit arrangements used by its Middle Eastern subsidiaries in the U.A.E., Egypt, and Saudi Arabia as further described below:

United Arab Emirates

The Company’s credit facilities in the United Arab Emirates (“U.A.E.”) consist of the following:

Active Facilities (U.A.E.)

The Company maintains a credit facility with a financial institution in the U.A.E. totaling 65.2 million U.A.E. Dirhams (“AED”) (approximately $17.8 million at* January 31, 2026*). Borrowings under the facility bear interest at the Emirates Inter Bank Offered Rate (“EIBOR”) plus 3.5% per annum, subject to minimum interest rates ranging from 4.5% to 8.0% per annum, depending on the type of financing utilized. The facility is stratified by instrument type and expires at various dates through* October 2026.As of January 31, 2026,the Company was in compliance with all covenants under this facility. As of January 31, 2026*, the Company had outstanding borrowings of 9.4 million AED (approximately $2.6 million), which are included in “Short-term borrowings and current maturities of long-term debt” on the Consolidated Balance Sheets. Additionally, as of* January 31, 2026*, the Company had issued guarantees totaling 30.9 million AED (approximately $8.4 million). After accounting for outstanding borrowings and issued guarantees, the Company had unused availability of approximately $6.8 million under the credit facility as of* January 31, 2026*.

The Company maintains a letter of credit facility with a financial institution in the U.A.E. totaling 100.0 million AED (approximately $27.2 million at* January 31, 2026*) and expiring in* July 2026.The facility is non-interest bearing; however, the Company incurs a commission ranging from 0.8% to 1.0% per annum on the face value of issued instruments and is required to maintain cash collateral (margins) ranging from 10% to 15% depending on the type of instrument utilized. As of January 31, 2026,the Company had outstanding guarantees under this facility of 40.5 million AED (approximately $11.0 million). The remaining available balance under the facility was 59.5 million AED (approximately $16.2 million) as of January 31, 2026.*

Expired Facilities (U.A.E.)

As of* January 31, 2025*, the Company maintained a credit facility with a financial institution in the U.A.E. totaling 65.2 million AED (approximately $17.7 million). This facility, which expired in* August 2025,bore interest at a rate of approximately 7.9% as of January 31, 2025*. Outstanding borrowings under this facility were $0.1 million at* January 31, 2025*, and were included in “Short-term borrowings and current maturities of long-term debt” on the Consolidated Balance Sheets. As of* January 31, 2025*, the Company had unused availability of approximately $9.0 million, which was net of issued guarantees and letters of credit.

As of* January 31, 2025*, the Company maintained a revolving credit facility with a financial institution in the U.A.E. totaling 8.0 million AED (approximately $2.2 million). This facility, which expired in* July 2025,bore interest at a rate of approximately 7.9% as of January 31, 2025*. Outstanding borrowings under this facility were $0.4 million at* January 31, 2025*, and were included in “Short-term borrowings and current maturities of long-term debt” on the Consolidated Balance Sheets. As of* January 31, 2025*, the Company had unused availability of approximately $1.6 million, which was net of issued guarantees and letters of credit.

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Egypt

In* June 2021,the Company's Egyptian subsidiary entered into a credit facility with a financial institution in Egypt, which has been subsequently amended. The facility provides project-based financing and expires in December 2026.The facility has a maximum borrowing capacityof 120.0 million Egyptian Pounds ("EGP") (approximately$2.4 million) and 100.0 million EGP (approximately $2.0 million) as of January 31, 2026* and2025, respectively. The line is secured by certain assets of the subsidiary, including accounts receivable, and contains various covenants, including a maximum leverage ratio and restrictions on incurring additional indebtedness. As of* January 31, 2026,*the Company was in compliance with all covenants under this facility.

As of* January 31, 2026*, borrowings under the Company’s credit facility in Egypt bore interest at rates ranging from 15.0% to 20.8%. The 15.0% rate relates to specific government-sponsored initiatives, while the 20.8% rate applies to our general facility limits. The Company had $0.2 million outstan ding under this arrangement as of* January 31, 2026*, and an insignificant amount outstanding as of* January 31, 2025*. Both amounts are included in "Short-term borrowings and current maturities of long-term debt" on the Consolidated Balance Sheets. As of* January 31, 2026* and2025, the Company had unused availability of approximately $2.2 million and $2.0 million, respectively.

Saudi Arabia

In* March 2022,the Company’s Saudi Arabian subsidiary entered into a credit arrangement with a financial institution in Saudi Arabia for a revolving line totaling 37.0 million Saudi Riyals (“SAR”) (approximately $9.9 million at January 31, 2026*). The credit arrangement provides project-based financing at interest rates competitive in Saudi Arabia, is secured by certain assets of the subsidiary including accounts receivable, and expires on* April 27, 2026.As of January 31, 2026*, the facility bore interest at a rate of approximately 8.5%. As of* January 31, 2026,the Company was in compliance with all covenants under this arrangement. The Company had outstanding borrowings of $2.9 million and $1.5 million as of January 31, 2026* and2025, respectively, which are included in “Short-term borrowings and current maturities of long-term debt” on the Consolidated Balance Sheets. Unused availability under this arrangement was $5.3 million and $3.0 million as of* January 31, 2026and2025,* respectively, which are net of both outstanding borrowings and issued letters of guarantee.

Foreign credit facilities - overall

These credit arrangements are in the form of overdraft facilities and project financing at rates competitive in the countries in which the Company operates. The lines are secured by certain equipment, certain assets (such as accounts receivable and inventory), and a guarantee by the Company. Some credit arrangement covenants require a minimum tangible net worth to be maintained, including maintaining certain levels of intercompany subordinated debt. In addition, some of the revolving credit facilities restrict payment of dividends or undertaking of additional debt. The Company guarantees only a portion of the subsidiaries' debt, including foreign debt. As of* January 31, 2026* and* January 31, 2025*, the amount of foreign subsidiary debt guaranteed by the Company was approximately $8.4 million a nd $4.8 million, respectively.

The Company was in compliance with respect to the covenants under the credit arrangements in the U.A.E., Egypt, and Saudi Arabia as of* January 31, 2026*. Certain of these arrangements are subject to periodic renewal; while such renewals are being processed, the Company remains in regular communication with the lenders, and the arrangements have historically continued without interruption or penalty. On* January 31, 2026*, interest rates were based on (i) the EIBOR plus 3.5% per annum for the U.A.E. credit arrangements, which have minimum interest rates ranging from 4.5% to 8.0% per annum; (ii) interest rates ranging from 15.0% to 20.8% for the Egypt credit arrangements; and (iii) an interest rate of 8.5% for the Saudi Arabia credit arrangement. Based on these base rates, as of* January 31, 2026*, the Company's interest rates ranged from 7.1% to 20.8%, with a weighted average rate of 8.1%, and the Company had facility limits totaling$57.3 million under these credit arrangements. As of* January 31, 2026*, $21.1 million of the facility limits were utilized to support letters of credit to guarantee amounts committed for inventory purchases and for performance guarantees. Additionally, as of* January 31, 2026*, the Company had borrowed$5.7 million and had an additional$30.5 million of borrowing availability remaining under the foreign revolving credit arrangements. The foreign revolving lines balances were included as a component of "Short-term borrowings and current maturities of long-term debt" on the Consolidated Balance Sheets as of* January 31, 2026* and* January 31, 2025*.

Finance obligation - buildings and land. On* April 14, 2021,the Company entered into a purchase and sale agreement (the "Purchase and Sale Agreement") to sell its land and building in Lebanon, Tennessee (the "Property"). Pursuant to the terms of the Purchase and Sale Agreement, the Company sold the Property for $10.4 million. The transaction generated net cash proceeds of $9.1 million. Concurrently with the sale of the Property, the Company paid off the approximately $0.9 million remaining on the mortgage note on the Property to its lender. The Company used the remaining proceeds to repay its borrowings under the Senior Credit Facility, for strategic investments, and for general corporate needs. Concurrent with the sale of the Property, the Company entered into afifteen-year lease agreement (the “Lease Agreement”), whereby the Company is leasing back the Property at an annual rental rate of approximately $0.8 million, subject to annual rent increases of 2.0%. Under the Lease Agreement, the Company hasfour consecutive options to extend the term of the lease byfive years for each such option. As of * January 31, 2026 and2025, the Company had a net book value relating to this asset of $1.7 million and $1.8 million, respectively.

In accordance with ASC842, Leases, this transaction was recorded as a failed sale and leaseback as the present value of lease payments exceeded substantially all of the fair value of the underlying asset. The Company utilized an incremental borrowing rate of 8.0% to determine the finance obligation to record for the amounts received and will continue to depreciate the assets. The current portion of the finance obligation of $0.3 million is recognized in "Short-term borrowings and current maturities of long-term debt" and the long-term portion of $8.5 million is recognized in "Long-term finance obligation" on the Consolidated Balance Sheets as of* January 31, 2026*. The net carrying amount of the financial liability and remaining assets will bezero at the end of the lease term.

Mortgage Note.On July28, 2016, the Company entered into a mortgage agreement secured by the Company's manufacturing facility located in Alberta, Canada that matures on December23, 2042. As of* January 31, 2026*, the remaining balance on the mortgage in Canada is approximately 5.4 million Canadian Dollars ("CAD") (approximately $4.0 million at* January 31, 2026*). The interest rate is variable, and was 6.3% at* January 31, 2026*. The principal balance is included as a componentof "Short-term borrowings and current maturities of long-term debt" and "Long-term debt, less current maturities" on the Consolidated Balance Sheets and is presented net of issuance costs of $0.1 million as of* January 31, 2026* and* January 31, 2025*.

Loan Payable to GIG. In June 2023,in connection with the formation of a joint venture with Gulf Insulation Group (“GIG”), the Company assumed a promissory note with an aggregate principal amount of approximately $2.8 million, which originally carried a maturity date of April 9, 2026.Subsequent to the fiscal year ended January 31, 2026,the Company and GIG entered into discussions to formally extend the maturity of the note. While a specific revised maturity date hasnot yet been finalized, both parties expect the joint venture to continue for the foreseeable future and the joint venture has continued to operate without any restrictions or disruption. Because the Company doesnot currently have a contractual, unconditional right to defer settlement for at leasttwelve months following the balance sheet date, the obligation is classified as a current liability within “Short-term borrowings and current maturities of long-term debt” at* January 31, 2026,compared to its classification within “Long-term debt, less current maturities” at January 31, 2025.The Company is currently evaluating a formal amendment to the note agreement and will reclassify the debt to long-term in future periods should a formal extension beyondone* year be executed.

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Note6 - Leases

The Company enters into lease agreements for real estate, including office space, production buildings, and land, as well as non-real estate assets such as heavy machinery, office equipment, and vehicles. Our leases are classified as either operating or finance leases at the commencement date. Operating leases consist of each of the above asset types, which have lease terms of 2 years to 30 years. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities short-term, and operating lease liabilities long-term on the Consolidated Balance Sheets. Finance leases consist primarily of heavy machinery with lease terms of 4 to 5 years. Finance leases are included inproperty, plant, and equipment, net, current maturities of long-term debt, andlong-term debt, less current maturities on the Consolidated Balance Sheets. Our lease agreements* may*include options to extend or terminate the lease, as well as options to purchase the underlying asset. These options are factored into the lease term and the measurement of right-of-use ("ROU") assets and lease liabilities when it is reasonably certain that the Company will exercise them. These decisions are based on an assessment of economic incentives, such as the strategic importance of the underlying asset to our regional operations and the expected fair market value of the assets at the end of the lease term.

As most of our leases donot provide an implicit interest rate, the Company uses its incremental borrowing rate ("IBR") to determine the present value of lease payments at lease commencement. The IBR is the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment. In determining the ROU asset and corresponding lease liability, we evaluate whether a contract contains a lease by assessing if we have the right to control the use of an identified asset for a period of time in exchange for consideration. For arrangements involving multiple components, we have elected the practical expedient to combine lease and non-lease components (such as common area maintenance and utility charges) into a single lease component for all underlying asset classes.

Certain of our real estate lease agreements include variable lease payments based on inflation rates, which are contractually capped. These payments arenot included in the measurement of the lease liability and are recognized in the period in which the obligation is incurred. Our lease agreements donot typically include material residual value guarantees or restrictive covenants; where present, they arenot expected to result in material payments. Furthermore, the Company has elected the short-term lease exception for all asset classes, whereby we donot recognize ROU assets or lease liabilities for leases with an initial term of12 months or less that donot include a purchase option we are reasonably certain to exercise.

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Supplemental balance sheet information related to leases is as follows:

Total lease costs consist of the following:

(1) Includes variable lease costs, which arenot material

Supplemental cash flow information related to leases is as follows:

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Weighted-average lease terms and discount rates are as follows:

Maturities of lease liabilities as of* January 31, 2026*, are as follows:

Rent expense on operating leases, which is recorded on a straight-line basis, was $4.8 million and $2.5 million for the years ended* January 31, 2026* and2025, respectively.

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Note7 - Income taxes

(1) The domestic loss from continuing operations before income taxes includes corporate overhead costs.

Repatriation of foreign earnings

As a result of theone-time transition tax from the U.S. Tax Cuts and Jobs Act of2017 (“Tax Act”), the Company estimates that distributions from foreign subsidiaries willno longer be subject to incremental U.S. federal income tax as they will either be remittances of previously taxed earnings and profits or eligible for a full dividends received deduction to offset any U.S. federal income tax liability on the undistributed earnings. However, upon repatriation, various state taxes and foreign withholding taxes* maybe levied on such amounts. Current and future earnings in the Company's subsidiaries in Canada and Egypt arenot* permanently reinvested. Earnings from these subsidiaries are subject to tax in their local jurisdiction, and withholding taxes in these jurisdictions are considered. The Company's liability was $1.3 million and $0.8 million as of* January 31, 2026and2025,* respectively, related to these taxes.

Recent U.S. tax legislation

On* July 4, 2025,new tax legislation was signed into law (known as the “One Big Beautiful Bill Act” or “OBBBA”), which makes permanent many of the tax provisions enacted in2017* as part of the Tax Cuts and Jobs Act that were otherwise scheduled to expire at the end of2025. In addition, the OBBBA makes changes to certain U.S. corporate tax provisions, several of which arenot effective until fiscal2026. The Company evaluated the provisions of the OBBBA effective during fiscal2025 and determined that there wereno material impacts on its consolidated financial statements. The Company is currently evaluating the potential impact of provisions effective after fiscal2025.

U.S. income and foreign withholding taxes havenot been recognized on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that is indefinitely reinvested outside the United States. The Company intends to permanently reinvest the undistributed earnings of its Middle Eastern and Indian subsidiaries. The Middle Eastern and Indian subsidiaries have unremitted earnings of $82.8 million and $14.2 million, respectively, as of* January 31, 2026.Unremitted earnings of $51.1 million in the United Arab Emirates wouldnot* be subject to withholding tax in the event of a distribution, and $31.7 million of unremitted earnings in Saudi Arabia would be subject to withholding tax of $1.6 million. The Company hasnot recorded a deferred tax liability related to any financial reporting basis over tax basis related to the investment in these foreign subsidiaries as it isnot practical to estimate.

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The reconciliation between the U.S. statutory federal income tax rate and the Company’s effective income tax rate for the years ended* January 31, 2026* and2025 in accordance with ASU2023-09 guidance, is detailed in the following table:

The Company's worldwide effective tax rates ("ETR") were 24.9% and 29.1% in the year ended* January 31, 2026and2025* respectively. The change in the ETR was largely due to changes in the mix of income and loss in various tax jurisdictions and the domestic GILTI inclusion. State income taxes, net of federal income tax effect, primarily relate to Tennessee and Texas in the year ended* January 31, 2026,and primarily relate to Tennessee in the year ended January 31, 2025.*

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As of* January 31, 2026and2025,* the Company had deferred tax assets of $3.7 million and $4.9 million, respectively, related to gross U.S. Federal net operating loss ("NOL") carryforwards of $16.6 million and $23.8 million, respectively. Of this amount, $9.3 million will begin to expire between tax years2036 and2037, with the remaindernot subject to expiration. As of* January 31, 2026and2025,* the Company had deferred tax assets of $1.6 million and $1.5 million, respectively, related to gross state NOLs of $22.2 million and $21.9 million, respectively, that expire between2026 and2045. The Company continues to maintain a valuation allowance against its state NOLs. As of* January 31, 2026and2025,* the Company had deferred tax assets of $0.2 million and $0.3 million, respectively, related to gross foreign NOLs of $1.2 million and $1.3 million, respectively, for its subsidiary in Saudi Arabia, which can be carried forward indefinitely and doesnot have a valuation allowance recorded against it. The ultimate realization of the tax benefit is dependent upon the future generation of operating income in the respective tax jurisdictions.

The Company periodically reviews the adequacy of its valuation allowance in all of the tax jurisdictions in which it operates, evaluates future sources of taxable income and tax planning strategies and* may*make further adjustments based on management's outlook for continued profits in each jurisdiction.

Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of the existing deferred tax assets. The Company continues to maintain a valuation allowance against certain domestic deferred tax assets including its foreign tax credit carryovers, R&D credit carryovers, and state deferred tax assets. Management has released $0.2 million of valuation allowance related to R&D credit carryovers in the period ending* January 31, 2026*based upon expectations of future taxable income. The amount of the domestic deferred tax assets considered realizable, however, could be increased if there are changes to the objective positive and negative evidence considered.

The Company has a deferred tax asset of $1.9 million for U.S. foreign tax credits after considering the impact of the repatriated foreign earnings and theone-time transition tax. The foreign tax credit deferred tax asset is fully offset with a valuation allowance. The excess foreign tax credits are subject to aten-year carryforward and will expire on* January**31,* 2027.

The following table summarizes uncertain tax position ("UTP") activity, excluding the related accrual for interest and penalties:

Included in the total UTP liability were estimated accrued interest and penalties of $0.5 million and $0.4 million as of* January 31, 2026and2025,* respectively. These non-current income tax liabilities are recorded in other long-term liabilities in the Consolidated Balance Sheet and recognized as an expense during the period. The Company's policy is to include interest and penalties in income tax expense. On* January 31, 2026,the Company didnot* anticipate any significant adjustments to its unrecognized tax benefits within the nexttwelve months. Included in the balance on* January 31, 2026were amounts offset by deferred taxes (i.e. temporary differences) or amounts that could be offset by refunds in other taxing jurisdictions (i.e., corollary adjustments). Upon reversal, $1.3 million of the amount accrued on January 31, 2026*would impact the future ETR.

The Company is subject to income taxes in the U.S. federal jurisdiction, and various states and foreign jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. Tax years related to* January 31, 2023,2024, and2025 are open for federal and state tax purposes. In addition, federal and state tax years January 31, 2007through January 31, 2010*are subject to adjustment on audit, up to the amount of research tax credit generated in those years. Any NOL carryover can still be adjusted by the Internal Revenue Service in future years’ audits.

The Company's management periodically estimates the probable tax obligations of the Company using historical experience in tax jurisdictions and informed judgments. There are inherent uncertainties related to the interpretation of tax regulations in the jurisdictions in which the Company transacts business. The judgments and estimates made at a point in time* maychange based on the outcome of tax audits, as well as changes to or further interpretations of regulations. If such changes take place, there is a risk that the tax rate may*increase or decrease in any period. Tax accruals for tax liabilities related to potential changes in judgments and estimates for federal, foreign and state tax issues are included in other long-term liabilities on the Consolidated Balance Sheets.

The components of income taxes paid, net of refunds received, consisted of the following (in thousands):

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Note8 - Retirement plans

401(k) plan

The domestic employees of the Company participate in the PPIH401(k) Employee Savings Plan, which is applicable to all employees except employees covered by collective bargaining agreement benefits. The Company matches 100% of each participant's payroll deferral contributions up to 1% of their compensation, plus 50% of each participant's payroll deferral contributions on the next 5% of compensation.

Company contributions to the401(k) plan were $0.4 million for each of the years ended* January 31, 2026and2025*.

Multi-employer plans

The Company contributes to a multi-employer plan for certain collective bargaining U.S. employees. The risks of participating in this multi-employer plan are different from a single employer plan in the following aspects:

The Company has assessed and determined that the multi-employer plans to which it contributes arenot significant to the Company's consolidated financial statements. The Company doesnot expect to incur a withdrawal liability or expect to significantly increase its contribution over the remainder of the contract period. The Company made the following contributions to the bargaining unit supported multi-employer pension plans (in thousands):

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Note9 - Stock-based compensation

The Company has prior incentive plans under which previously granted awards remain outstanding, but under whichno new awards* maybe granted, including the Company's2021* Omnibus Stock Incentive Plan, which expired in* May 2024.At January 31, 2026*, the Company had reserved a total of 20,465 shares for grants and issuances under these incentive plans, including issuances pursuant to unvested or unexercised prior awards.

The Company's2024 Omnibus Stock Incentive Plan dated* May 28, 2024was approved by the Company's stockholders in July2024* ("2024 Plan"). The2024 Plan will expire in* July2027.* The2024 Plan authorizes awards to officers, employees, consultants and independent directors. The2024 Plan provides for the grant of deferred shares, non-qualified stock options, incentive stock options, restricted shares, restricted stock units, and performance-based restricted stock units intended to qualify under section422 of the Internal Revenue Code.

Grants were made in connection with the2024 Plan and the prior incentive plans to employees, officers, and independent directors, as further described below:

Stock compensation expense

The Company has granted stock-based compensation awards to eligible employees, officers or independent directors. The Company recognized the following stock-based compensation expense for the periods presented:

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Stock options

The Company didnot grant any stock options during the years ended* January 31, 2026* or2025. The following table summarizes the Company's stock option activity:

No stock options vested during the year ended* January 31, 2026.During the period, options representing 300 shares were forfeited or expired. As of January 31, 2026,*300 fully vested stock options remained outstanding and exercisable, and there wasno unrecognized compensation expense related to stock options.

Deferred stock

As part of their compensation in previous years, the Company granted deferred stock units to each non-employee director, equal to the result of dividing the award amount by the fair market value of the common stock on the date of grant. The stock vests on the date of grant; however, it is distributed to the directors only upon their separation from service. During the year ended* January 31, 2026*, all 62,926 deferred stock units outstanding as of* January 31, 2025*were distributed.

Restricted stock

The Company has granted restricted stock to executive officers, independent directors, and employees. The restricted stock vests ratably overone tofour years. The Company calculates restricted stock compensation expense based on the grant date fair value and recognizes expense on a straight-line basis over the vesting period. The following table summarizes the Company's restricted stock activity:

The fair value of vested restricted stock vested during theyear ended* January 31, 2026* and2025 was $2.3 million and $0.9, respectively. Additionally, there was $1.3 million and $1.0 million of unrecognized compensation cost related to unvested restricted stock granted under the plans as of* January 31, 2026* and* January 31, 2025*, respectively. These costs are expected to be recognized over the weighted-average period of 2.1 years and 1.7 years, respectively. Further, the Company had approximately 0.2 million shares of non-vested restricted stock granted under the plan as of* January 31, 2026*. The remaining amount of non-vested restricted stock is expected to vest over the weighted-average period of 2.1 years.

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Note10 - Interest expense

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Note11 - Joint venture and non-controlling interest

On* June 1, 2023,the Company closed on its formation of the joint venture (the "JV Agreement" or "JV") with Gulf Insulation Group ("GIG") a leading provider of pre-insulated piping systems and pipe fabrication, in which the Company acquired a 60% financial controlling interest and contributed assets consisting of a building and equipment. The JV is a limited liability company named Perma Pipe Gulf Arabia Industry and is a closed joint stock company established under laws of the Kingdom of Saudi Arabia. The JV's capital is comprised of ordinary shares with60%* owned by the Company and the remaining 40% owned by GIG. This collaborative business arrangement expands the Company's market presence in Saudi Arabia, Kuwait, and Bahrain. The primary business activities of the JV include the manufacture and sale of the pre-insulated piping systems and pipe coating services. The other party to this business arrangement acquired a40% non-controlling interest in the JV by contributing assets (i.e. acquired by the JV) of approximately $6.8 million in fair value, mainly consisting of an idle building and equipment. The fair value of the net assets contributed was determined through the use of athird-party appraiser using the indirect cost method.

The Company is the ultimate parent of the JV through its 60% financial control and as part of the JV Agreement has majority control of the operational activities of the JV andno joint control exists. The JV Agreement hasno veto or kickout rights and board voting is proportional to the ownership interest. Certain activities do include atwo-third majority affirmative vote of shareholders of the JV and include acquiring another company, establishing new subsidiaries, entering another partnership or joint venture, and any merger or material change to the business of the JV. These are considered protective rights.

Pursuant to the applicable guidance in ASC805, Business Combinations and Noncontrolling Interests, the Company determined that the transaction didnot meet the necessary conditions to be considered a business as the set of assets acquired didnot contain an organized workforce and therefore was recorded as an asset acquisition. The assets transferred by the Company to the JV were recorded at historical cost, andno gain was recognized as a result of this exchange since the Company has a controlling interest in the JV. The Company’s measurement of the acquired assets is comprised of the fair value of the contributed net assets given up by the Company and the fair value of the non-controlling interest, excluding the contributed assets. The non-controlling interest attributable to the other party was recorded as of the investment date and was measured as part of the carrying amount of the ownership interest in the net assets given up by the Company plus the fair value of the non-controlling interest, excluding the contributed assets.No gain or loss was recognized as a result of this exchange. In connection with the joint venture, the Company also assumed a promissory note issued as part of the formation of the JV in the principal amount of $2.8 million payable to GIG. The principal amount is presented on the Consolidated Balance Sheets as a component of "Short-term borrowings and current maturities of long-term debt" at* January 31, 2026,and as a component of "Long-term debt, less current maturities" at January 31, 2025.*The Company also has a promissory note due from the JV that was issued as part of the formation of the JV in the amount of approximately $4.2 million, which is eliminated in consolidation.

The Company has a60% controlling financial interest in the joint venture which isnot considered a wholly owned subsidiary. Accordingly, there remains a minority portion of the equity interest that is owned by athird party, GIG. Pursuant to the applicable guidance contained in ASC810, Consolidations, the balance sheets and operating activities of this investment are included in the Company's consolidated financial statements. As of* January 31, 2026*, the carrying amount of the assets and liabilities of the JV that are consolidated by the Company totaled $44.2 million and $18.6 million, respectively.

The Company adjusts net income in the consolidated statements of operations to exclude the proportionate share of results that is attributable to the non-controlling interest. Additionally, the Company presents the proportionate share that is attributable to redeemable non-controlling interest as temporary equity within the Consolidated Balance Sheets. This mezzanine presentation is the result of the non-controlling interest being subject to a put option that isnot solely within the Company's control and in connection with the equity shares of the business arrangement that is redeemable any time afterfive years following the date of incorporation. The redemption amount per the JV Agreement is at fair value of the non-controlling interest which is the fair value of ordinary shares of the JV owned by GIG. Further, neither the call option nor put option contained in the JV Agreement met the definition of a derivative as a result ofnot containing a net settlement provision and the sharesnot being readily convertible to cash, thereby being considered embedded with respect to non-controlling interest andnot a freestanding instrument.

As a result of the non-controlling interest being subject to redemption rights that arenot entirely within the Company's control, it was concluded that the necessary conditions were met to be accounted for in accordance with ASC480, Distinguishing Liabilities from Equity. Pursuant to this accounting standard, the Company determined that the only criteria for the security to become redeemable is the passage of time and, therefore, is considered probable of redemption. The Company made a policy election to measure changes in the non-controlling interest immediately as they occur and adjust the carrying amount of non-controlling interest equal to its redemption amount as the non-controlling interest hasno stated fixed price or fixed date. As such, at each subsequent balance sheet date following the formation of this business arrangement, the Company must determine whether further adjustment is required to increase the carrying value of the redeemable non-controlling interest. If the Company determines that the fair value of the redeemable non-controlling interest exceeds its carrying value, an adjustment is made to reflect this change. However, if the value is determined to be less than its carrying value, such adjustment is limited to its original carrying value at the formation of the business arrangement. Additionally, adjustments made to reflect the change in the value of the redeemable non-controlling interest are offset against permanent equity within the Consolidated Balance Sheets. Further, net income attributable to the NCI is deducted from net income to arrive at net income attributable to common stock on the Consolidated Statements of Operations.

The following table summarizes the activity for the redeemable non-controlling interest:

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Note12 - Segment reporting

The Company operates underone segment: Piping Systems. The results are presented on a consolidated basis to the Chief Executive Officer who serves as the chief operating decision maker ("CODM"). The accounting policies of the Company's segment are the same as those described in the summary of significant accounting policies. For further information, see Note2 - Significant accounting policies, in the Notes to Consolidated Financial Statements.

The CODM regularly reviews consolidated revenues, significant expenses, and consolidated net income attributable to common stock to make operating decisions and assess performance. The CODM uses this information in making company-wide decisions when determining how to allocate resources.

Significant expenses represent amounts that are regularly provided to the CODM and included in consolidated net income attributable to common stock. Additionally, the CODM regularly reviews asset information by our reporting segment in a manner that is consistent with the presentation on the Company's accompanying Consolidated Balance Sheets.

The following table summarizes the Company's revenues, net income attributable to common stock, and significant expenses:

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Note13 - Subsequent events

Credit Agreement

Subsequent to* January 31, 2026*and prior to the issuance of these financial statements, the Company entered into a credit agreement (the “ Credit Agreement”) with JPMorgan Chase Bank, N.A. (“JPMorgan”). The Credit Agreement provides for a revolving credit facility that is expected to be used to refinance and replace the Company’s existing credit facility with PNC Bank, National Association.

The Credit Agreement is intended to serve as a temporary bridge financing arrangement. The Company expects that, in the coming months, it will enter into a new global credit facility with a syndicate of lenders, with JPMorgan acting as administrative agent and lead arranger. Upon execution of the global credit facility, any outstanding borrowings under the Credit Agreement are expected to be rolled into the global credit facility, and the Credit Agreement will be terminated; however, there can beno assurance as to the timing or terms of such transaction.

The Credit Agreement provides for a revolving credit commitment of up to $18.0 million, subject to customary borrowing base limitations, and matures in* October**2027.* Borrowings bear interest at variable rates based on SOFR or an alternate base rate, plus an applicable margin. The Company is also required to pay a commitment fee on the unused portion of the facility. The credit facility contains customary representations and warranties, affirmative and negative covenants, and events of default. The obligations under the Credit Agreement are secured by specified collateral and guaranteed by certain subsidiaries of the Company, subject to customary exclusions.

As the Credit Agreement was entered into after* January 31, 2026,*no amounts were outstanding under the facility as of that date.

Lease Agreement

Subsequent to* January 31, 2026,in connection with the previously announced expansion of the Company’s operations in the U.S. Northeast, the Company entered into an operating lease agreement for an industrial facility located in Hebron, Ohio. The lease has an initial term of 86 months and is expected to commence in thefirst* quarter of fiscal2026. Upon commencement, the Company expects to recognize an estimated right-of-use asset and a corresponding lease liability of approximately $3.8 million on the Consolidated Balance Sheet. Total future minimum lease payments under this agreement are approximately $4.9 million.

Geopolitical Developments

Subsequent to* January 31, 2026,geopolitical tensions involving Iran have escalated, contributing to increased regional security risks and operational uncertainty in certain areas where we operate. As of the date of this filing, our facilities remain operational, and we havenot* incurred material asset impairments or experienced material contract cancellations. However, the situation remains fluid and* may*adversely affect our operations, project execution, and the carrying value of our assets. We continue to monitor developments and assess potential impacts on our business, financial condition, and results of operations.

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